The Australian dollar resumed its decline today after halting the drop yesterday. The currency firmed during the previous trading session after the monetary policy announcement of the Australian central bank. But the Aussie continued to move lower during the current session amid risk aversion prevailing on the market.
Yesterday, the Reserve Bank of Australia left its key interest rate unchanged at 1%, in line with expectations. The RBA signaled, though, that interest rate cuts are possible in the future:
It is reasonable to expect that an extended period of low interest rates will be required in Australia to make progress in reducing unemployment and achieve more assured progress towards the inflation target. The Board will continue to monitor developments in the labour market closely and ease monetary policy further if needed to support sustainable growth in the economy and the achievement of the inflation target over time.
The Australian Bureau of Statistics released trade balance figures yesterday. The trade surplus widened to A$8.04 billion in June from A$6.17 billion in May. That is instead of falling to A$6.05 billion as economists had predicted.
Today’s docket was light in terms of macroeconomic data in Australia. The Australian Industry Group/Housing Industry Association Australian Performance of Construction Index dropped to 39.1 in July from 43.0 in June. Being below the 50.0 level of no change, the indicator suggested that the sector was declining more sharply last month. In fact, it was the steepest decline in six years.
AUD/USD declined from 0.6759 to 0.6728 as of 13:33 GMT today, sinking to the low of 0.6677 intraday. EUR/AUD climbed from 1.6562 to 1.6686, while its daily high was at 1.6785. AUD/JPY dropped from 71.96 to 71.10.
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